Egyptian Pound (EGP) - Currency of Egypt

Some Facts That You Ought To Know About The Egypt Currency:

• The short name for the Egyptian Pound is EGP.
• The most frequently used coins are 1 Piastre, 5 Piastre, 10 Piastre, 20 Piastre, 25 Piastre, 50 Piastre, and LE 1.
• The most commonly used banknotes include 5 Piastre, 10 Piastre, 25 Piastre, 50 Piastre, LE 1, LE 5, LE 10, LE 20, LE 50, LE 100, and LE 200.

Egyptian Pound - History of the Egyptian Pound

The Egyptian pound, EGP, is Egypt's official currency, and just like Egypt, the currency also has a complex yet rich history. Ever since its introduction, the Egyptian pound also called ‘gineh’ has undergone a number of changes which reflect the economic and political development of the country. The Egyptian pound is also represented as LE, for livre égyptienne; French for Egyptian pound. Read on to learn about the history of the Egyptian Pound.

Prior to the pound, the standard Ottoman unit of currency, the kurus, was adopted in Egypt. Each kuru was broken down into 40 silver para. The Egyptian currency was introduced in the form of gold and silver coins in 1834, and two years later, the pound of 100 piasters was introduced as the basic monetary unit. However, in the year 1885, the bi-metal system ceased, and the pound was now only dependent on gold for its value, which was around 7.34 grams of gold. On 3rd April 1899, the National Bank of Egypt issued the countrys first banknote. There was a picture of 2 Egyptian camels on one side and a few decorations on the other. After the first paper note was issued, the responsibility of issuing the currency was handed over to the Central Bank.

Post World War I, Egypt moved to the British Pound and remained a part of the Sterling era up to the year 1962. The EGP was also switched over to the USD and was pegged at EGP 1= USD 2.3. By then, the pound was completely Egypitianised. Until 1962, the Egyptian pound and the Pound Sterling were connected, after this, the EGP was linked to the US dollar. This resulted in the EGP losing out on its value and now equalled USD 2.3.

The Central Bank of Egypt issued a banknote in 1979, which was smaller than the previous one and had a new design. On one side of the note is a picture of the Qatbay Mosque, while the other has a picture of the Abu Simbel Temple. This design is available on the EGP to date.

Factors Affecting the Egyptian Pound

In the year 2023, the Egyptian pound went to an all-time low, it dropped about 20 to the greenback, the US dollar. While as per most financial experts, the worst is yet to come, as the Egyptian currency might plummet further. A number of elements over the years have played a role in making the Egyptian pound the sixth worst-performing currency globally. Let us take a look at some of the major factors that affect the Egyptian pound:

1. The embattling economy

Skyrocketing inflation of 31.9%, is continuously adding pressure on the Egyptian pound. A few months back, the IMF, International Monetary Fund, allowed a loan of 3 billion dollars to help salvage the country's ailing economy. The Central Bank of Egypt has recently increased the major interest rates by almost 300 points in an effort to tame inflation.

2. Unpegging of EGP

Until 2016, the EGP was partially pegged to the US dollar. With the aim of receiving a $12 billion bailout from the IMF, Egypt announced unpegging the pound and being a free-floating currency. With this decision, the value of EGP dropped quickly.

3. Egyptian exports - the silver lining

Some experts believe that with the current global scenario, Egyptian exports would see an increase as the country can offer products at a more competitive price. Local manufacturers have a tremendous potential of seizing this opportunity. The country enjoys a strategically well-placed geographical location, and the labour is not just cheap but also skilled. The growing population is another significant factor that can help the country move towards a free economy.